Photo Credit: Shakira by Serenity / CC by 3.0
Blackstone is selling $372 million in bonds backed by royalties from the catalog of Recognition Music (formerly Hipgnosis), with over 47,000 tracks.
Backed by Blackstone, Recognition Music Group—the former Hipgnosis—is selling $372 million in bonds tied to royalties from the music of artists like Shakira, Journey, Red Hot Chili Peppers, and Justin Bieber. The bonds are backed by a vast catalog of over 47,000 recordings and compositions, 76% of which were released over a decade ago.
Music catalogs, especially those managed for royalty-backed bonds, typically see a minority of songs generating the majority of revenues. It is common in music asset management for roughly 10-20% of tracks to account for 80-90% of profits. Sync opportunities present new revenue streams for catalog owners, especially if a sync play pays off with viral status on social media.
The deal is part of Recognition’s broader strategy of tapping into the asset-backed securities (ABS) market fueled by music royalties. Proceeds will be used to repay debt and fund reserves. The transaction is structured as a music royalty ABS, with the bonds collateralized by royalties from a catalog valued at just shy of $3 billion.
The increasing popularity of streaming services has led to bolstered royalty cash flow, which in turn has made such bonds attractive to investors. Recorded music streaming revenue reached $20.4 billion in 2024, compared with around $1.8 billion ten years prior. That trend is expected to continue, and the music royalty ABS market has seen significant activity this year as a result.
Recognition Music Group, formerly Hipgnosis, was founded in 2018 by music industry executive Merck Mercuriadis to buy song rights. After a tumultuous few years, it was acquired by Blackstone in 2021 and rebranded. Notably, the company has a history of tapping the song-backed debt market, including selling $1.47 billion of notes at the end of last year, and its inaugural music royalty ABS in 2022.
While this isn’t Blackstone’s first song and dance in this space, the company isn’t without its contemporaries. News of the ABS comes just days after the announcement of a jaw-dropping $1.8 billion ABS by Concord.
Music Industry News, Music Streaming, Pop Culture, Wall Street
This post was originally authored and published by Ashley King Digital Music News via RSS Feed. Join today to get your news feed on Nationwide Report®.
